My home is for sale and I have been approached about a sub-2 sale , leaving the mortgage in place.

Asked by Joe, 60174 Mon Sep 22, 2008

What should I know about sub-2 sales, drawbacks, dangers , benefits???

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Vince Coniglione’s answer
Vince Conigl…, , 60174
Thu Aug 27, 2009
Hello Joe,

A "subject to" sale is one of many creative ways of structuring a home sale. You need to understand all aspects of the deal before you proceed and it depends on your situation as to whether or not it makes sense for you. You should have your attorney review any contract to make sure it is equitable.

If you are willing to consider a "subject to" sale, have you considered a rent-to-own sale? I think this will provide you more control over your property, is probably a more common scenario, and provides the same end result (the sale of your property). But you have to be willing to be a landlord or have a qualified management company handle the property for you. Again, I recommend you have your attorney review any rent-to-own contract to make sure you have all of the bases covered.

"Subject to" and rent-to-own scenarios are becoming more common in today's market because buyers are finding it more difficult to qualify for financing. Lenders have increased the requirements for loans and some buyers have dings on their credit that prevent them from qualifying. With "subject to" and rent-to-own purchase scenarios, the buyer does not have to qualify immediately for financing and has time to repair their credit prior to having to qualify for a loan. When you find a motivated buyer, these type of sales lead to a win-win deal for all involved.

Have a great day! Vince
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Chris Clark, Agent, Saint Charles, IL
Mon Sep 22, 2008
Joe - What is your situation? There can be some serious benefits and dangers with this type of arrangement. What you really need to understand is that the mortgage will still be in your name and someone else will be making the payments. I would strongly encourage using a 3rd party payment processor to make sure the payments are getting made. Also, if you have equity in the property, what is going to happen to that? Are you going to get a payout at closing? You really need to make sure you know the financial stability of the person that will be making the payment. Remember, it's still your credit at stake. The benefit here is a faster closing and very little qualification and costs for the buyer If you would like to discuss further, email me.
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